Facebook had not paid corporation tax in the UK in 2012, despite generating digital advertising revenue of £223m in the UK during the year, according to its latest accounts.
Accounts filed with Companies House also reveal that the social network’s tax bill dropped from £238,000 in 2011 to zero, whilst reporting a 70% rise in UK income.
A Facebook spokesperson said in a statement that the firm pays all taxes required by UK law and compiles with tax laws in all countries where it operates and has employees and offices.
"We take our tax obligations seriously, and work closely with national tax authorities around the world to ensure compliance with local law," the spokesperson said.
Facebook’s move to process its UK sales in Ireland, which avoids tax, would reignite the debate about how US tech firms are not putting in their fair share to the British economy.
On the other hand, France is also pushing for Europe to implement a new corporation tax regime, which would see multinational firms including Google and Facebook regulated and taxed in the countries where consumers use their websites.
According to a forecast from eMarketer, Facebook, together with Google, accounts for about half of the £6bn anticipated to be invested on UK’s digital advertising this year, with the search engine firm capturing a 43% slice, while Facebook’s share is projected to reach £303m in 2013.
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Recently, Google paid $55m in UK corporate tax for 2012 sales of nearly $5bn, in the midst of criticism in the country that tech giants are paying less tax.
In July, Western governments revealed plans to target major tech firms that use loopholes in the tax system to ‘dodge’ tax.
